Shares of Computer Associates plunged 43.5 percent yesterday – lopping $12.8 billion worth of value off of the company – after Wall Street responded angrily to a surprise July 4 holiday earnings warning from the company.

Shares of the company plunged $21.88 per share to $29.25.

Company CEO Charles Wang, the highest paid exec in the U.S. last year, is $468 million poorer today following the sell-off. He holds 3.81 percent of the outstanding shares.

Still, Wang’s loss yesterday does not erase his 1999 compensation, when he brought home a whopping $655 million in salary, bonus and stock options. That total was reduced last month to $511 million after shareholders sued.

Computer Associates executives promised after the suit was settled to shape up and turn the fourth-largest software company around.

Company executives now blame the expected shortfall on contracts they thought would have been signed by now but have not come through. They also said that European sales are slowing.

“Revenue wasn’t as strong in the quarter as we had hoped,” said Sanjay Kumar, the president and chief operating officer of Computer Associates, who saw his stake in the firm fall in value by $90 million yesterday.

“We intend to work aggressively to address the performance issues in our European business,” he added.

But analysts were not convinced. More than eight major brokerage houses downgraded Computer Associates.

Goldman Sachs’ Anne Meisner said that despite the sell-off bringing the stock to an attractive valuation, she does not expect a material turnaround in the stock until Computer Associates demonstrates an improved performance.

Her remarks were echoed by other Wall Street insiders.

“I don’t see any particular reason to rush back in to buy these shares, even now, when they are low,” said Damian Rinaldi, an analyst with First Albany Corp. “We’ve got to see them executing the strategy before we’ll go back to buying the stock.”

Rinaldi said analysts expressed shock and surprise to Kumar and other company executives during a conference call yesterday morning. Wang was not on the call.

But Rinaldi said the analysts were not too upset with the timing of the bad news over the July 4 break from trading. In an attempt to avoid bad press, Computer Associates issued the warning just before midnight on Monday – knowing full well that the markets were closed on Tuesday.

Analysts and investors found out anyway, and some weren’t even that upset.

“The timing was consistent with the discovery,” he said. “The quarter just ended, and they were running the numbers, and as soon as they knew that the numbers weren’t there, they make the announcement. It’s unfortunate that it was on a holiday, but there wasn’t any palpable tension or any big criticism of management expressed on the conference call for the timing.”